OCSL - Earnings call transcript Q2 2024 | Oaktree Specialty Lending Corporation

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Operator

Welcome, and thank you for joining Oaktree Specialty Lending Corporation's Second Fiscal Quarter Conference Call. Today's conference call is being recorded. [Operator Instructions] Now I would like to introduce Michael Mosticchio, Head of Investor Relations, who will be host today's call. Mr. Mosticchio, you may begin.

Michael Mosticchio

welcome Call. Specialty and Fiscal Corporation's operator, Conference Quarter you, to Lending Oaktree Second Thank

release, we the earnings presentation our Our which at can accompanying and website be slide the accessed on oaktreespecialtylending.com. Investors of issued section this morning

Armen and the Chief Officer Operating Matt Matt President; Stewart, are Officer; Financial Chief Chief Chris Executive Chief Joining us McKown, today Officer Panossian, on Pendo, call and Investment and Officer. Treasurer;

our financial to want include we you views comments on to, I call other operating reflecting Before today's our forward-looking statements among that remind current respect performance. with future begin, things, results and

Our undertake actual refer expressed to materially duty revise or no in discussion statements. those Please in filings SEC implied factors for a to update results or could forward-looking differ our of any statements. We the detail. forward-looking these from further

like I'd interest that like call to OCSL section offer to on an any or others the over corporate announce website. media information turn material constitutes the Investors note company in investors, purchase and Oaktree review encourages an to this would others offer call and to solicitation it Investors should of to its I now that, shares the you sell on that any uses nothing website With to information. its remind Matt. that fund. The of to the

Mathew Pendo

for today Thanks, and OCSL. you Mike, Thank and your interest in and everyone. joining us for of welcome, support

the quality. share to was on that improvement prior origination per per that a Adjusted credit portfolio. nonaccruals the robust Our shift by line roughly earnings of in $X.XX activity drove the Steady several second was NII an with share, progress quarter highlighted $X.XX led in for quarter. our composition positive and in

of rate strength in reflect OCSL, floating income interest the power results from portfolio. These our predominantly including earnings the solid ongoing

quarter. start the the were which of results the concentrated the occurred and towards were by primarily end of capital quarter our at which of impacted timing repayments, the deployments, However,

into rotation average approximately continued our quarter. In primarily by addition, first-lien basis portfolio weighted our spread the reduced XX in loans points

at XX% increased XXXX, to have declared decreased X the share, the investments same approximately from XX, $X.XX September same from quarters. to the of first-lien with dividend over per At We Our period. X% XX% past consistent a time, second-lien XX% investments today.

value work upon successful continue nonaccruals are we We repositioning underperforming of and companies quality leveraging our resources expertise teams that restructuring also of quarter. the credit Oaktree, deliver our progress the with shareholders. maximize challenged as quarter. around our and Strong positions in improved no and and nonaccrual portfolio history we confident of closely The drive us can investments to some deep outcomes management for our long important during the several turning made proven well enabled of new to the during successfully investments as

as of certain The per share per to X.X% end reflected others. nonperforming restructurings nonaccrual down on share our represented at $XX.XX the the markdowns was status That on for prior due Investments and on cost. lower to quarter at further portfolio portfolio of from well of X.X% quarter. fair valuations value the quarter. declined $XX.XX fair at at investments, NAV the prior from cost and value as decline on at X.X% some both X.X%

investments. we momentum of of the consisted the activity investment prior new on robust the building million of from originated Our $XXX $XXX in commitments when million quarter, new quarter

investing approach sponsor, in interest credit and healthy We opportunities nonsponsor our highly rate this publicly current as amid for investments, find environment. selective flow across to even to we higher uncertainty the attractive maintain longer bolstering deal continue traded

investments leverage structures. the and end, included values. weighted yield debt our attractive lower with at deal XX.X%. This yields Importantly, on average To new our new originations to were loan made lender-friendly that was

from million and $XXX front, paydown On in received the exits quarter. second the repayment we

continues M&A active environment. steady portfolio receive repayments Our less of a levels in even to

have been selling strength out by in the investments. of credit opportunistically the certain markets liquid capitalizing on also We public debt

Over has larger selection which over, the valuations strength believe sell investment process. over the our the that at underwriting reflects have debt, largely to and pay of these at rates past ability turned prove of XX% we our Exits years, when competitors. portfolio refinance X occur successful down or attractive companies lower to

and opportunities in with mind. investment pursue We outcomes decisions these make

that taken call to support the Armen, of over in OCSL. a our turn wanted actions I has highlight I to Before significant manager

As base permanent interest assets agreed and to commitment part fee shareholders, from has in yesterday of X% Oaktree aligning gross to our strong to X.X%. that our management reduction our significant a with we on announced

reminder, a part management of of closed the January quarter fees million been as has of that merger As last each Oaktree OSIX year. waiving in $X.X

original transaction, will year $XXX,XXX the occurred fee decrease agreement, second the For of the which quarter per those January. close the to waivers following for this

both the March However, fee XXXX per June million Oaktree keep $X.X agreed to and for waivers the quarter quarters. at

turn of share a Armen adjusted to increase OCSL's net color shareholders. income the our share more to larger on by activity call This lowers and directly of allows our of and portfolio $X.XX in With that, on environment. reduction improvement will would this adjusted investment income investment market our cost annually. expect X.X% We flow I operations like this investment provide over the net to line, estimated return income approximately to equates annually. per our an to to Bottom

Armen Panossian

and conclude begin hello, our portfolio then comments Matt, Thanks, environment. market the I'll everyone. observations on with regarding with and activity

remain investing with well the of billion structure. quarter. prior portfolio With secured at invested in was capital XX% top quarter. the loans, consistent on with $X the portfolio of diversified the across close senior companies value fair at XXX We the Our of focused

of the at portfolio First-lien value. for accounted XX% loans fair

on larger businesses Median portfolio million, also We in prior of emphasize weighted roughly overall the below at line was and XX well current nearly X.Xx. portfolio's company further rates middle at March approximately quarter. continue investments companies base steady in X.Xx, market was And risk. also to mitigate based levels. EBITDA to was portfolio leverage diversified with The our coverage as leverage interest more $XXX in steady average

million leveraged quarter, platform to investment Oaktree's we transactions. March across In XX of commitments originate $XXX the new

array we and secondary Our originations public credit were XX deals, us fund across and and XX and participated to including Notably, size, private ability purchases. a broad in X debt markets, spanning where of opportunities, primaries sponsor-led reputation to the dispersed underwrite enabled quickly X Oaktree private participate. private transactions

million all yield our value of compelling XX.X%. our and approach investments, across our defensive found also credit originations purchasing reflecting secondary relative new were in We was purchases. primary markets, XX% first-lien $XXX market quarter investment originations public and issues the the in for the average of

steady opportunities Our supported remains across the quarter, and robust in nonsponsored a origination current by activity pipeline sponsor of borrowers.

to quality. Turning credit

quarter nonaccrual made as This significant As our progress status. Management was these in by part OTG situations. noted, during through nonaccruals working Matt of the from the driven we decreased removal

company higher As OTG to airports from was model concession across business expense interest performing the the a several well, a operates this increase has meet but business solid reminder, in a in rates. struggling burden its U.S. and is base

it back cash result, the eroded a for restructuring of the its giving a lenders company. tied exchange their reflect in on equity resulting in quarter-over-quarter of down February, restructuring this We in in costs. court As out investment portion placed to sheet status declines for debt accrual to restructured following balance the

generates for leads our web leads, from insurance removed partially which in we all investment nonaccrual companies. Additionally,

company its from we accrual The noncore its back the back in restructuring March, status manager as this company on As a on tranches is restructured of replaced a strategic a debt reminder, financial position on and completed focused prior is of executing inherited the solid footing the in on X initiatives. debt XXXX.

We secondary second nonaccrual Acquisition trading our levels. improvement CPC lien also Corp., sold small its a of removed public out after in an following position from we

wanted on on an quarter. that we an provide also to update I aggregator nonaccrual last Amazon placed

company February, company a support position for with team deleverage have We success. late its in lenders the to position and protection to lender-led financing. filed and strengthen been sheet working management protected liquidity long-term bankruptcy and the for In balance financial the the

marked we term our equity a result this, and As of investment our off loan. wrote down preferred

systemic recent solid placed in Our overall challenges not as companies faced or view nonaccrual within portfolio. idiosyncratic We by broader shape. issues portfolio and indicative of is on the

persistently are to With market potential that create view for of on in costs increased given companies. some to closely I'll mind, the rates for environment. course, borrowing interest stress and monitoring these all the Of our our investments, we high turn

supportive Over rates. the in meaningful the rally, across past experienced widespread the capital have the to loan by leveraged market. including that months, lead will The interest credit confidence X credit tight historically has markets investor but overall decline remains driven inputs, in drivers, leading multiple spreads a private market landing soft strength and trend to

the outlook, in expectations. that upside, U.S. the already economy While downside aren't we have bearish risks outweigh or we overly inflation believe overly may markets priced the optimistic about given

pace than the Specifically, extent we about declines, trajectory anticipating currently in. what and is rate priced of a are interest more skeptical modest

such, remain As we to refinance to this where borrowers elevated debt to they the for XXXX, debt could coming challenges years. rates loads will which pose need high prior companies could continue Against our with were caution. that or compared in to backdrop, exercise

approach upon remain relative public as value, credit private We invest selectively Oaktree's apply our and investment prioritizes markets. we expertise resources that across to drawing will selective substantial prudent and and

of for well to shareholders. volatility the on and performance continue Importantly, navigate strong to liquidity near-term with portfolio we remain ample behalf construct capitalized long-term

our discuss results Now call more the financial detail. to to in Chris I will turn over

Christopher McKown

Thank you, Armen.

a was X fees, in net with Matt share due on driven and noted, or expenses modest This first adjusted or compared professional reported we slight slightly offset in by partially investment income. quarter. decline per total fees the $X.XX in adjusted income the net The Part $XX.X interest investment As to $XX.X dollar lower basis increase primarily by was expense million lower as per a incentive share quarter. million of $X.XX

in in and in decrease quarter share for decreased driven of million primarily of income interest total the from outstanding. liens. the $X.X compression shares per out weighted investment was the due The capital quarter of result was adversely rotation increase by primarily spread resulting second by deployment a $XXX,XXX impacted income, timing average an higher-yielding decrease to and the by Adjusted the

This purchase par acceleration fee our both with were investment was by CSI acquired acceleration GAAP resulting from financial OCSL. that to repayment income repayments. partially results note the in higher amendment investments certain million OID from and offset We'd mergers in from the due increase $X.X and premium price of lower a fees and prepayment

$XX.X decline second fees X was $X.X mainly interest by Net The million, expenses professional million million down for Part fees, lower lower $X.X lower and driven $X.X million of million of $X.X expense. of sequentially. the quarter totaled incentive

base a rate at $X quarters million and Oaktree Matt management agreed quarter. June fees over to the of As highlighted, total million waive the $X.X March of per

will ample and the effect We our Starting on XXXX, Shifting of a management that to fees as agreed to fee new our management will into calculated Oaktree capital X, liquidity. balance net waive position merger. base with be of July strong sheet. OSIX X% go part maintain the base

Our remains we should us find net compelling the debt to end to room market. range equity our of at leverage target the plenty about in of X.XXx, grow providing more opportunities low on

exceeded Newly enabling of funded $XXX of million, activity and grow from million us exits sales $XXX portfolio. proceeds to investment repayments, the

debt was at total interest had interest at XX, of steady interest level December rate total quarter. remained rates consistent the Unsecured a line debt of billion the as prior in March outstanding also quarter rate quarter. the of effect with XX% the end weighted of end, the average swap the X.X%, and of agreements, represented quarter our during $X.XX with including As

continued Our $XX pipeline. to further million of to constructive issuance quarter ATM under share bolstered the the through balance common fund environment able market We equity our on were our sheet raised program. was capitalize in

issued were an to NAV. shares XXX% at These average our premium

with excluding of funds amount ventures -- liquidity Unfunded joint met $XXX Our million undrawn million, capacity companies approximately whereas at unfunded milestones to drawn. facilities. that strong on $XXX $XXX were is be subject immediately, by the before be can $XXX to including with drawn approximately portfolio our must quarter be million the commitments is eligible remaining to certain end, cash and billion credit $X of million commitments

Turning ventures. to our now X joint

strong JVs the million Together, Our broadly delivered of primarily investments, quarter $XXX syndicated JVs loans of across performance. in spread XX companies. another again hold portfolio

again quarter to due assets aggregate X.Xx JVs which ROEs, the of nearly for addition Leverage at with to the For annualized at in connection the our portfolio increased quarter, combined attractive XX%. JV partners. end the in the to generated

results strong year financial of challenged made and we summary, second fiscal with investments our our In are continue half we've pleased to on XXXX. us progress balance believe positions well and to that the sheet the for date our

for Matt closing Now back call remarks. some will turn the to I

Mathew Pendo

Thank you, Chris.

We are the the pleased quarter for further earnings financial earnings. several resilience of by our years, the second growth over the those demonstrates past in performance our and

for our on and by XX.X%, was net investment again adjusted continues income at return which Our is targeted be of higher covered quarter range, dividend the to end earnings. the once our

our we and optimize will ahead, being investment. believe have we investments for Looking are plans each that nonaccrual proactive with the place in recovery

In addition, to our our in fee our all, our optimistic be will our future and fee and upon building immediately. ongoing to look quite ROE All returns track of record effective about new structure attractive waivers forward we are long-term to delivering shareholders. accretive

participation on for Operator, happy call your take your OCSL. the As lines. to open and always, With questions. interest we that, today appreciate your the please in we're

Operator

Brian with comes question [Operator Instructions] Our Mckenna JMP. Citizens from first

Unknown Analyst

Great. Okay.

reduction. So a the dividend question on the management fee and

for fee and quarter the XXX%, interest that's and rates dividend then second other before change, $X.XX changes any than that the and any less underlying the still to annualize in credit I reduction portfolio. across if So then in add is coverage results

then So confident you be in able is out? the curve months, every what your XXX basis what to point assuming full makes And rates? us plays remind can move forward you'll to year the XX looking sensitivity earnings XX over next you the in to out dividend

Mathew Pendo

Brian. Sure, Thanks the for question.

given in dividend. So in change feel dividend cover about high the our feel July level, the the as comfortable ability future which very to management at our is fee, a given X% and X good of we to the and

terms quarter some of timing and that were just the inter-quarter One results fundings. then in of the repayments this things impacted

there was necessarily annualize little and it. So take quarter just -- bit wouldn't I this a

fee done as about balance and the -- the well for that together, quarter pipeline So difference, dividend. this feel all timing add quarter, as very for we comfortable adjusting covering think we the you we we cetera, then we've as the at et of this already fundings look and our quarter, as that the feel with -- waiver, but

thing one it. pipeline So see on our quarter I timing think the kind the of the is we just focus of and then just as

Unknown Analyst

it. Got

Helpful. gears And a Okay. shifting here. then bit

Just portfolio, experienced It's looking the X%. solid up investment growth at about it's year-to-date.

quarters? get as expectation here. of for of investment next So as couple the prepayments And what's around of to portfolio just sense from your new the well a I'm the activity trajectory trying

Armen Panossian

This is Armen.

deal in activities active or up, it or and terms back have fundings. sense a the of part the a healthy second that have there. calendar markets quarter, as of -- the very good We will We for quite seeing the M&A of this loan. already a market we we pipeline we And are obviously. new public more funded are, when direct deal I have that makes as unexpected quarter. sense $XXX for million so remain pretty consider balance do is potentially But our don't market quarter deploy the think opening for public activity well. We volume could in repayments I do

the for sure will that makes another I specific of number. think originations pipeline. more about I in But have just month on volatility that we million But I sense. the of to quarter guide this watch to know think, based is that good April, I'm $XXX we periods for a potential quarter, could continue what We not strong start so opportunity far. the a or

Operator

Finian from O'Shea comes with Fargo. question Wells Next

Finian O'Shea

spreader quarter, this origination it's some some not question, public first at looking OID. participation, So There's deals. much private

offset are generating? does of returns cut, you and to with expect this sort So the this to that is mean be fee just fee this the cut the does combining -- going way things an

Armen Panossian

last first kind We XX% months a I years months balance for were increase our now of -- first ago. of our exposures. on lien. first-lien even a XX% And kind has of percentage higher of Fin, portfolio of a the the view The lien largely might portfolio We're XX ago, XX and would is that to of migrated risk say in reflection first markets. substantially it's couple in Armen. over lien

we that adequate appropriate long As more more aligning fees, run, the or over X% thought management level at the of sort was consistent. of we looked

to the flow. and markets going ebb think are And I

spreads our around that our to what think for widen. continued prediction to have dividend shareholders doing months, deliver is I will making the been think obviously, the as not on low We're do But XX we last we that volatility best deliver thought the reduce and continue migration, a they tightened shareholders. the be may to a and to do to way which they have the over we first-lien fee good that. now would time stability -- that any dependable

not hard about last That's the of -- prediction really over very it's tightened any spreads we're vis-a-vis that. driving months certainly forward prediction But sort not It's market spreads. that on the a what's make has it. to XX just

Finian O'Shea

looks BDC $XXX hoping you And putting force Can size? the group and say, along monthly perhaps you related you're nontraded to the where a distribution the and helpful. you're million follow-up platforms a resources into to runs, month. like moving say, That's on this Brookfield or that be that at, or goes talk about sort are of it, on, a as, total cadence

Armen Panossian

for the It's other or as not for channel. have called investment all. on side the do Solutions the burden wealth solutions Yes, at projection as activities I retail that responsible cadence in Brookfield expect for investment that BDC hope something to analytics. don't partnership distraction Oaktree and go Oaktree our nontraded terms our Wealth Oaktree sourcing on continue have on channel what a terms of of well team a is the team is the That at and Fin, could monthly tell really resources, and I both teams grow to. we Brookfield you in to a or for products

it's we I just with multiple as in capital that across channels, our more, then including the say, partnership powerful markets, would Oaktree whole think solutions a grown made have providing the I counterparty institutional, structure and our And offer...

Finian O'Shea

but -- distraction you? alarmed it a be we be should where level to at is or it just Like of at sort burden would Like a looking month if, for interrupt, what freeze or sorry X XX, say,

Mathew Pendo

it's Matt. Fin,

we've So X XX been years. month raising a about for X

going rest I been, worked we but a where where fine about And we're Armen BDC. it's predictions Oaktree -- been fine. fine steady resources. and said, for cadence. works that's go, the make that's that's just it's as and So It don't of Like don't that for to our

I could It's been of too for much X wouldn't Oaktree, well months kind everything. X don't that BDC what thinking happen spend and that about I time just well it. that's how we're is -- So kind for -- XX works works of

Operator

with The comes next question Jefferies. Kyle Joseph from

Kyle Joseph

that the income. of it you spreads guys think then attribute in really then we on do in And your But would the timing know Or decline your those? I'm in a Just the terms modeling, more I that about than you interest timing. was factor to yield reported just spreads? both was stable quarter-on-quarter, -- talked mistaken. of majority and portfolio thing how either of if I not

Matthew Stewart

It's Matt Stewart.

this in second-lien know within see friction book of yield. kind to of between and the March. bps $XXX we offset quarter we a and around level portfolio on About about of And weighted our by our normally to noted, on probably of And on what work we'll impacting we deployments. I'll we've wouldn't repayments. the throughout made quarter. we average, and amounted the about XX always quarter that a mid-February nonaccruals penny quarter. But about have as normal spreads the then our did now did had by probably Armen impact half talked in call That the and XX have during that, progress our lot we our some overall, But of remarks, compression deployments were million I So prepared of points. back-weighted spread in basis was average deployment

Kyle Joseph

for Got a it. Very helpful. follow-up And then just me.

portfolio tied give sense a On trending? NPAs majority it like us have how the and just to valuations performance quarter, that the been in unrealized the was sounds for of the NPAs, and ex depreciation

Christopher McKown

was portfolio just Chris. it's the flat Kyle, the that ex quarter-on-quarter. I NPAs, relatively would say

the driver. You right that's that out the point really most

Matthew Stewart

mean, I our Thrasio, assets in predominantly, were the Impel during quarter of the Yes. OTG, all write-downs from XX/XX. nonperforming and

Operator

comes from question with next The Paul Johnson KBW.

Paul Johnson

Congrats the announcement. fee cut on

an this of fee the you're obviously, developments, of announcement, confident the the and but a pretty any during confident cut, book in of handle the of some that's needed the on remaining ongoing, announcement the the credit timing you've it was of some I that with for On plan some got such in and restructuring, issues still the mean, with quarter, pretty [indiscernible]

Armen Panossian

this quality we regularly. maximizing about the issues any in anticipate confident get recoveries Yes, for do We or in well, to plan a market of both expected. the the continue engage faster the our about of even feel We're We We that to feel that and the the for a sort have portfolio. to repayments evaluating portfolio quality try we is positioned Armen. marks do feel in good that just We well may our have good than process the challenges the portfolio. as deploy. just of to we good in portfolio,

shareholders. So a think conservative and that we than we and do on certainly have that in very have challenges I it our capabilities is to hard small handful them marked taken really continue we've think even better outcome reflective on But hopefully we do recoveries that work is marks. conservatism. leverage of is maximize view to goal way favorable outperform marked It execute for in portfolio of to and those Oaktree's we that will an a the the where have pretty to

Paul Johnson

as color switching in was then out the kind season high activity activity. you [indiscernible] that quarter, the and I some market? in you've liquid to of to more higher-yielding or repayments of of of fairly give kind What if repayment And had sort of level a over can was balance wondering exits the just assets kind [indiscernible] terms what is in stuff? of

Armen Panossian

Yes.

including We chunky largest which probably private of and side, Doug, There some reasonably And payoff. the Ardana. kind Networks. repayments but in a of second-lien -- a there sized Blackhawk had on terms had small, -- mix. in position called or we in repayment were is company a repayments then it's small some a not in payoffs, in Melissa Just the are single repayment

So strong. the pretty repayments -- been have it's been

in side, rallying loan markets, especially we year senior the active this markets of have year. exits the pretty terms public the On this trading from in -- are and calendar benefited

exits. And of we the the side respect public loans some table total repayments. take than driven was to so realized some it those exits, of that actually -- in par par did by par a the both bonds side million the exit really and the it across higher we better on saw the And in And million chips in off recovery about on as of private private driven portfolio, proceeds in that have was terms $XX prices portfolio. we par we with that was side, some about $XXX the than

Operator

The with next Melissa question JPMorgan. comes Wedel from

Melissa Wedel

When the prior along answered Most of there follow had repayment cycles, just to actually just activity. were prepayment the think But about in the cuts think already. elevated been of income seen pace because asked and thread rate we we cycle. of I that some fee have higher

this we income than thinking been sort of for decline we've talking previous in be about likely for that be more longer extended, environment time, cycles? prepayment rate about long for you've is should rate what Given higher way the potential normalized in more a to a one a seen

Armen Panossian

I The it question. time, if just not for and/or business But multiples think have to your predictions just an remain a are elevated we trend the prepayments. strong think making good wanting no sponsor where extended low either that's when interest of enterprise a longer company rates valuation base of declining instinct I low, such you on a is It's handle prepayments, ultra a Armen. on see rising, that it's rates capital. right to enough needs will repayments driving period don't that Melissa, case. being return Thanks, sell because outperforms historic or and a

It likely. upside, loan idiosyncratic it's and was do did that because was something ago. most a Melissa of accretive thought the to So well -- well when repaid case there that bit prepayment, to a of performing company was or year than we year a that you for the performed through sponsor's faster pay Like that really was a had COVID a business. we it a and because business view see that a little or the in a was business would. over was ago about price willing was strategic Doug, for of it acquirer that the that And

as months of is this So wouldn't I there deal of pipeline but volume teed -- are our is that indicate XX or a volume But there's say slightly us ago. it that in up long versus that M&A that line deal that happening. being with I say conversations also forward look M&A short-term we elevated wave at terms would today maybe XX

months were XXXX. XX late should in, most say, -- will be they higher the let's over than XXXX prepayments next and of So

speed be to sponsor pick that going at up, transactions expect used sponsor it's to to I sponsor would I especially. up. to quite pick But to strategic to don't pre-COVID same sales were we think the

Mathew Pendo

predict if last is, years, X turned actually you the the of hard to rising that XX% which over, And reasons all over over go occurred during our a back Melissa, one has it's of rate portfolio environment.

So little have it one a would thought bit lower. be would

So predict. Armen as really Doug. like mentioned, Melissa It's to difficult and idiosyncratic it's

project out year kind the to on of point. it's for So next tough that

Melissa Wedel

steady portfolio though. Yes. talked the pretty in hope being I leverage Fair I quarter-on-quarter. median That's but really know you I about EBITDA didn't enough. this, and miss helpful,

portfolio EBITDA in of seeing sort you're of basis? revenue your what trends curious and Just generally terms company on a year-over-year

Armen Panossian

way weaker sort would the feet, I would for say, feet. wouldn't not generally materially way revenue EBITDA, generally to XX,XXX portfolio like Melissa, higher increasing But be consistent of modestly. -- is say this any portfolio. speaking, -- to any stable say, is and or of -- I wouldn't XX,XXX going that is observable it's revenue I the I by in certainly not it's stretch across stable. sort is

the revenue say much a and last of X generally or cost generally. sort up have the higher ignoring would up I seen few percentage of annually unlevered over years slightly X businesses, of EBITDA points borrowing how the last that's to so elevated X by over So Companies flat performance and years. gone

Operator

comes question next from with Rowe B. Our Bryce Riley.

Bryce Rowe

here Maybe seen relative discussion pipeline to you spread level I April seen. some wanted to months? $XXX compression start you that that with spread of speak Can perspective, the million the that you've X a how of maybe you've around the and spread what and this the level then you've funded seen to from looks with last spreads in over

Armen Panossian

It's question. a good Yes.

million we spreads have $XXX are this in that in the mid-XXXs. funded So April, in

or I kind late that's some at unitranche feedback. where XXXX, first think financing, flow where the pretty we deal were much saw maybe was frame, spreads though the And light as time XXXX, is XXX, that you XXX as typical that that in directional even on spread was the give this sponsor-led during of probably spreads. lien early top tick time. a In point

I XXX, levered even print then, spread. would even might the would towards see we XXX but forward. certainly XXX market XXX certainly occasional market this more In more deal or you anymore to there's an XXX at think really that since say, at low in above even inside low But atypical, lightly as -- anymore. to the I trending going a of -- is at of not mid-XXXs point situations, the but It's XXX is be, the market look

Bryce Rowe

about JVs. sheet balance at And Okay. and leverage, both to then then That's wanted the OCSL within helpful, ask Armen.

uptick an JVs. at noted balance the sheet in leverage You

appetite on-balance from, no -- up the is more I to it an I was higher? OCSL JVs X.X appetite Is there leverage to think take that of And sheet quarter-over-quarter. there? sheet balance perspective, at real What's end then X.X. Are sheet guess, to or perspective leverage leverage balance change the trying manage you your maybe lower range? the targeted from to year-over-year still a

Matthew Stewart

Stewart. It's Matt

As you noted, the heavy we in year. the issue did new back raise last we leverage facility to on X.Xx JVs at of put volume and the that the new

more to to as first rotate there target we is lien broadly X.XX Our get a to X.X portfolio. syndicated into

Xx the net do at leverage, little have a to then JVs. so ROE and sheet, the capacity. room over do on we we additional So have we those ended JV balance bit quarter grow And

far did million $XXX Armen quarter. As noted, fund this so we about

currently. leave we leverage get additional volatility. have So we Even of if the X.X, will fundings But at operate we at some top significant to we to closer target X.X X.XX. side and room for to capacity are our get do

Bryce Rowe

All Last one for Okay. me. right.

If quarters like done at little million from deck slide you market a public. the the price past. secondary the bit And in market perspective public of the for have an the heavier higher secondary and look second quarter activity, one might what that secondary than $X.XX, looks is within the $XX you so origination

that's see Just kind of you understand little thought a typically when kind wanted that maybe secondary purchase associated being to lower the it? there a of more level with and process that, price of see opportunistic you volume bit

Armen Panossian

in the Armen. made This kind of had markets higher rotations publicly We that some than just We've traded names of average is the of public book. public. higher spread are some sort in atypical

the in new market the also high that issue some were BBs CLO We bought XXs. in

where solid were So positions normal credit, sort spreads. CLO public portfolios in and these structured of are performing loan better than getting we

BBs be able placement of outsized issuance. pricing and partnership again, up aren't BBs, the get strong, as that of when AAA These see as we demand are by step fueled of sort really in in our our mid-XXXs. with choppier opens big or some there big tranche a the we're CLO for has CLO new to change in do and to the And the portfolio, demand the in spreads a able team strong trading some CLOs, activities a like credit in issuance is structured market but in get case sometimes terms -- CLO we on BB CLO find to

it in first and So of some quarter, we took calendar about feel pretty good those opportunity and that the we today. saw purchases

Operator

This Michael question-and-answer Mosticchio for concludes like our the to session. conference would over to closing any I remarks. back turn

Michael Mosticchio

the A on by beginning Great. joining Dave, for broadcast. for and hour website code earnings XXX-XXXX XXX-XXXX (XXX) call. U.S. Investors you approximately access thank all this conference dialing (XXX) callers or Thanks, non-U.S. will with section you the in days us XXX-XXXX, after Thank for of or all this callers today's replay XX X today's X for available for joining on call. call replay OCSL's be

Operator

presentation. attending Thank conference now for The you concluded. has today's

disconnect. may now You

Oaktree Specialty Lending (OCSL) 30 Apr 242024 Q2 Earnings call transcript